An upper limit for a variable, such as the upper limit on the interest rate paid or received in a transaction. For example, an adjustable-rate mortgage may have a cap of 10 percent. In this case, the rate can adjust however the loan terms provide, without exceeding 10 percent.
Also called a ceiling.
Cap is often used with its converse, a floor. A cap may be an embedded option, such as the cap on the rate for a floating rate loan, or a stand-alone option contract. American Banker Glossary
An upper limit on the interest rate on a floating-rate note ( FRN) or an adjustable-rate mortgage ( ARM). Also, an OTC derivatives contract consisting of a series of European interest rate call options; used to protect an issuer of floating-rate debt from interest rate increases. Each individual call option within the cap is called a caplet. Opposite of a floor. Bloomberg Financial Dictionary
This is a CREST Member's credit limit with his payment bank. The payment bank guarantees to meet client obligations up to this maximum. Dresdner Kleinwort Wasserstein financial glossary
Cap limit or credit line in CREST. Euroclear Clearing and Settlement glossary
An agreement with a counterparty that sets an upper limit to interest rates for the cap buyer for a stated time period. Exchange Handbook Glossary
An option strategy that sets a ceiling on the holder's interest rate exposure. LIFFE

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   The Common Agricultural Policy. This European Union policy was designed to stabilize commodity markets within Europe and ensure regular supplies at reasonable prices while guaranteeing farmers' income. It is implemented through a complex mix of price support mechanisms and export restrictions.
   ► See also EU, Green Rates.

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cap UK US /kæp/ noun [C] FINANCE
[C] an upper limit on the amount of money that can be spent or charged in connection with a particular activity: »

a price/salary/spending cap

a cap on sth »

They called for the government to keep the cap on public-sector spending.

impose/remove a cap »

The letter of intent defined the work to be carried out and imposed a cap on cost.

[C or U] ABBREVIATION for CAPITALIZATION(Cf. ↑capitalization) : »

We are investing in companies with an average market cap of $400 million.

See also LARGE-CAP(Cf. ↑large-cap) adjective, MID-CAP(Cf. ↑mid-cap) adjective, SMALL-CAP(Cf. ↑small-cap) adjective
cap UK US /kæp/ verb [T, often passive] (-pp-)
to put an upper limit on the amount of money that can be spent or charged in connection with a particular activity: »

Annual expenses on each fund will be capped at 1.25%.

See also CAP AND TRADE(Cf. ↑cap and trade)

Financial and business terms. 2012.

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Look at other dictionaries:

  • cap — cap …   Dictionnaire des rimes

  • cap — cap·no·di·a·ce·ae; cap·no·di·um; cap·pa; cap·pagh; cap·pa·ri·da·ce·ae; cap·pa·ris; cap·pe·len·ite; cap·pel·let·ti; cap·pie; cap·po; cap·py; cap·ra; cap·ral·de·hyde; cap·rate; cap·ric; cap·ri·cor·nis; cap·ri·dae; cap·ri·fi·cate; cap·ri·fi·ca·tion; …   English syllables

  • cap — [ kap ] n. m. • XIIIe; mot provenç. « tête », lat. caput I ♦ Vx Tête. ⇒ chef. Mod. Loc. De pied en cap [ dəpjetɑ̃kap ] :des pieds à la tête. ⇒ 1. complètement. Armés de pied en cap. II ♦ 1 ♦ (1387) Pointe de terre qui s avance d …   Encyclopédie Universelle

  • Cap — (k[a^]p), n. [OE. cappe, AS. c[ae]ppe, cap, cape, hood, fr. LL, cappa, capa; perhaps of Iberian origin, as Isidorus of Seville mentions it first: Capa, quia quasi totum capiat hominem; it. capitis ornamentum. See 3d {Cape}, and cf. 1st {Cope}.] 1 …   The Collaborative International Dictionary of English

  • CAP-10 — Vue …   Wikipédia en Français

  • Cap 10 — Vue de l avion Type Avion de voltige Motorisation Moteur Lyc …   Wikipédia en Français

  • cap — Cap, m. N est pas naif Francois, Car le Francois dit chef, ce que le Gascon dit Cap, Et l Espagnol Cabo, et l Italien Capo, tous quatre issans du Latin Caput. Et combien qu envers le Gascon ce mot signifie aussi teste, ce neantmoins le Francois n …   Thresor de la langue françoyse

  • Cap — als Abkürzung steht für: Calender Access Protocol, Übermittlungsprotokoll für Kalenderdaten zwischen beliebigen Groupwareservern. CAMEL Application Part: Transportprotokoll aus der Familie des Signalling System 7 für CAMEL Anwendungen in… …   Deutsch Wikipedia

  • CAP — als Abkürzung steht für: CAP (Automobilhersteller), ehemaliger belgischer Automobilhersteller CAP (Markt), eine Supermarktkette betrieben von behinderten/benachteiligten Menschen CAP Customer Advantage Program GmbH, verantwortlich für HappyDigits …   Deutsch Wikipedia

  • Cap 24 — logo de Cap 24 Création 20 mars 2008 Disparition Octobre 2010 Slogan « La chaîne capitale » Langue …   Wikipédia en Français

  • cap — cap1 [kap] n. [ME cappe < OE cæppe & ML cappa < LL cappa, a cape, hooded cloak] 1. any closefitting head covering, brimless or with only a front visor, and made of wool, cotton, etc., as a baseball cap or overseas cap, or of muslin or lace …   English World dictionary

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